By Ed Price

Everyone likes to harp on about political polarization in the U.S. Ironically, that's a form of groupthink — a "follow the herd" mentality that sucks in commentators and analysts and blinds them to opposing ideas. Today, we are witnessing one of the darndest examples of groupthink among commentators I can recall: the war in Iran.

There is a near universal consensus that President Donald Trump's war in Iran has been a disaster, a massive unforced error. Foreign Policy said the U.S. has suffered a bigger defeat than Vietnam. National Review said the war was lost outright. A broad swath of America is lamenting a loss of prestige on the world stage and the ceding of negotiating power to the Iranians.

These things may all be true. But they aren't the whole truth.

The most important time to identify groupthink is while it is occurring. So here is an alternative view of the war. Yes, it is contrarian. Bear in mind that I'm not attempting to persuade anyone one way or another. I'm simply reminding them they don't have to think so rigidly. There are some benefits from the war, to the West and to investors.

First, the war has served an important discovery function.

We in the West have gained priceless strategic information about the Iranian military's capabilities. We have learned Iran isn't as strong as we thought. In the early 2020s, Western analysts believed Iran to be the Middle East's dominant military force. The assumption was that if Iran attacked Israel and simultaneously unleashed its terror proxies, Israel could be overwhelmed. The war has shown that the Iranian regime and its proxies can't hold a candle to the Israeli or U.S. militaries. Similarly, the war in Ukraine has revealed Russia's shortcomings. Russia isn't nearly as strong as the West assumed before it invaded Ukraine.

Instead, the Russo-Iranian axis is on the back foot. Russia is supposed to specialize in wars of attrition. Russia is losing a war of attrition. The Iranian regime has plenty of cheap drones, but they aren't enough to win a war. If you are living in a NATO country, and you enjoy breathing, this is all good news.

Second, the war has signaled to the world that the U.S. will no longer be passive.

For a quarter-century, Western adversaries have built up their war machines, plotted a new world order, filled the internet with disinformation, disrupted democracy, conducted cyberattacks, and generally undermined the post-war peace. The West did nothing.

When Russian President Vladimir Putin annexed Crimea in 2014, for example, President Barack Obama's reaction was to take the U.S. back to the Monroe Doctrine: no American interference in European affairs. Putin has since flooded Europe and Latin America with Russian influence. Meanwhile, Iran has targeted recent U.S. presidential elections with cyberattacks. While democracies have been debating the chances of a nuclear World War III, these autocracies have been fighting it, although in more covert ways. American operations in Iran show the West is now willing to do something.

And what about markets? The war has churned the oil market and incited volatility in the stock market. Commentators started saying early on that inflation will skyrocket and economic growth collapse.

But the economic effects haven't been as bad as groupthink might indicate. Oil prices have nearly returned to their prewar levels. The major equity indexes have risen above their pre-war levels. The World Bank hasn't lowered its U.S. economic growth forecast for 2026 and actually thinks it will increase from its 2025 level.

There may yet be some tit-for-tat skirmishes in Iran, but there should also be a period of relative economic calm globally. From the war, Iran learned it has more leverage over markets than militaries. The regime needs intercontinental trade first, intercontinental missiles second. For some time, Iran will focus internally on their economic rebuild. I suspect the Iranians will be far less interested in funding its terror proxies.

Everyone is worried about nuclear proliferation, and rightly so. But look at fossil fuel re-proliferation, too. The effective closure of the Strait of Hormuz reminded countries how much they need ample fossil fuel reserves. Some green-energy companies benefited initially from the war, but that died down. Renewable energy is a one to two decades-long play, not a trade based on a four-month war. I expect any country with oil or gas to start pumping with renewed vigor.

There will also be increasing numbers of autarky trades as the great powers continue along the road to greater self sufficiency. That presents a buying opportunity for investors. I'd buy an economy's domestic fundamentals first, regional trade exposures second, and global trade third.

Investors should remember foolish eras of groupthink of the past. After the fall of the Berlin Wall, liberal democracy would reign forever, that the euro currency was dead after 2010, that inflation was beaten back forever in the 2020s, to name a few.

A near universal consensus claims the Iran war has done no good. Perhaps. But groupthink is always a goof.

Guest commentaries like this one are written by authors outside the Barron's newsroom. They reflect the perspective and opinions of the authors. Submit feedback and commentary pitches to ideas@barrons.com .

Edward Price teaches at New York University's Center for Global Affairs.

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